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Election battle looms over oil and gas local control in Colorado

Jacob Yzaguirre, left, and Brandon Green, both of H&P Drilling, work on a rig in Weld County in this April, 2013 file photo. (RJ Sangosti, Denver Post file)

A last-minute effort to provide a legislative fix to the question of more local control over regulating oil and gas companies came to a halt Monday, all but ensuring a vicious, costly and possibly game-changing election season in Colorado.

The potential legislation might have quelled about a dozen statewide ballot initiatives this November that would give Colorado towns and counties far more power over drilling.

Now the stage is set for the oil and gas industry and well-financed environmentalists to engage in an election battle that could bring tens of millions of dollars into the state.

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"In terms of how it plays out, it depends on which side comes across as moderate and most reasonable," political analyst Eric Sondermann said. "Who can capture those centrist voters who are open and supportive of some oil and gas development but who don't want it to be out of control. ... That's who will benefit."

Legislators, environmentalists, community representatives, oil and gas operators and Democratic Gov. John Hickenlooper's administration were involved in extensive discussions in the past week about a legislative solution before the calendar runs out on the 2014 session Wednesday.

The negotiations will not cease and could be resolved with a special legislative session this summer, said Eric Brown, a spokesman for Hickenlooper.

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"We're not done talking about it. We're going to continue talking about it and hope to reach an agreement sooner rather than later," Brown said.

When asked what specifically still needed to be hashed out among the varied interests, Brown said there are several moving parts but that a potential agreement could be close.

A draft of the possible legislation — obtained late last week by The Denver Post — specified that local governments may regulate noise, impose setbacks, conduct inspections or monitor oil and gas development to meet local permit conditions. No House Republicans signed on to the possible legislation.

Hickenlooper on Monday met with House and Senate Republicans to see if compromises could be made.

"There needs to be a vast majority of oil and gas industry support for the legislation. Then we'll at least consider it," said Rep. Jerry Sonnenberg, R-Sterling.

The Colorado Oil and Gas Association was not involved in the negotiation of a bill, said its spokesman, who added that any potential bill needed "broad industry and stakeholder support."

"Bills or ballot measures that change how oil and gas is governed will have dramatic impacts to every sector of the economy," Doug Flanders, a spokesman for COGA said in an e-mail.

In recent weeks, oil companies intensified negotiations on a bill. The companies hoped a legislative agreement would lead U.S. Rep. Jared Polis, a wealthy Boulder Democrat, to withdraw his support from some of the ballot measures that, among others, could allow counties to ban drilling.

Coloradans for Local Control, which is behind some of the ballot initiatives being promoted and has financial backing from Polis, thanked lawmakers Monday but expressed disappointment "that stakeholders could not reach a consensus."

"Even though the legislature was unable to find a solution to the problem, thankfully the Colorado constitution provides an initiative process for local Colorado citizens to fix their policy problems," said Rick Ridder of RBI Strategies, who is spokesman for Coloradans for Local Control.

"As Coloradans, we want every community to be able to determine what's right for its residents, from what school curriculum they use to whether they allow marijuana shops."

Meanwhile, Coloradans for Responsible Reform, which is backed by several prominent Democrats and Republicans and opposes the ballot measures, announced Monday it already has raised about $770,000 of contributions and pledges. The group includes heavy-hitters such as former Secretary of the Interior Ken Salazar.

The question of an attempted legislative compromise comes as Republicans and Democrats gear up for major midterm election battles, chief among them: GOP U.S. Rep. Cory Gardner's attempt to oust U.S. Sen. Mark Udall.

Although he did not stake out a position on the proposed ballot measures, Udall said he's "always concerned about legislating through constitutional amendments." Udall also hinted at the possibility of special session "given the high stakes and given the fact that many people of good will who are stakeholders in this discussion want to see a common ground."

The ballot initiatives likely will engage opposition from GOP voters this November — an added plus for a party that already typically benefits from higher turnout in non-presidential elections.

Monday, Polis said that the lawmakers "and partners in industry came very close to brokering a deal that would have given local communities the ability to choose what is best for them.

"The current law takes away our ability to choose what is best for our communities and families by forcing fracking to happen anywhere, anytime," Polis said. "The people of Colorado are demanding a reasonable balance between energy development and their quality of life. I will not stop fighting for a solution that does just that."

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